What is a Swing Failure Pattern (SFP)?
A Swing Failure Pattern (SFP) is a powerful technical chart pattern used in price action trading to identify potential market reversals. It is commonly seen on candlestick or bar charts and helps traders anticipate shifts in trend direction.
How Does an SFP Work?
The core idea behind an SFP is simple:
Price sweeps above a previous swing high or below a previous swing low but fails to sustain the move.
Instead of continuing in the breakout direction, the price quickly reverses, signaling a possible trend change.
When is it a Valid SFP?
✅ The price must sweep the previous high or low.
✅ The candlestick must close above the previous low (in case of a bullish SFP) or below the previous high (in case of a bearish SFP).
✅ Only the wick should extend beyond the previous level—if the candle body closes below/above the level, it is not an SFP, and the trend may continue.
Example on the Daily Timeframe
The image below illustrates two SFPs:
🔹 One to the upside (bearish reversal).
🔹 One to the downside (bullish reversal).
SFPs occur across various timeframes, making them a versatile tool for traders.
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